Company Update

Healthcare

October 2, 2018

Bionomics Limited (BNO-AU) Joseph Pantginis, Ph.D.

646-975-6968
Rating: Buy jpantginis@hcwresearch.com

Complexity of PTSD Hits BNC210; Hunkering Down With Reduced Price Target to A$0.55

Stock Data 10/02/2018 Swinging for the center field fence fell short. Last night, Bionomics
Price A$0.19 announced the highly anticipated Phase 2 PTSD data with BNC210, and
Exchange ASX the results were disappointing unfortunately. The 193 patient study did
Price Target A$0.55 not meet its primary endpoint on the standard PTSD endpoint, CAPS-5,
52-Week High A$0.64 which is a scored, structured assessment covering four major symptom
52-Week Low A$0.16 cluster. Analyses of other endpoints of the study did show encouraging
Enterprise Value (M) A$91 results in subdomains of the CAPS-5 measurements, including: (1)
Market Cap (M) A$94 evidence of antidepressant effects in the high dose group; and (2)
Public Market Float (M) 402.1 evidence of anxiolytic effects.
Shares Outstanding (M) 482.9 Antidepressant effect:
3 Month Avg Volume 363,789 CAPS-5 Criterion D (negative changes in cognition and mood)
Balance Sheet Metrics overall statistically significant at week one in the total population
Cash (M) A$24.90 (p<0.05).
Total Debt (M) A$21.40 CAPS-5 Criterion D (persistent negative emotional state)
Total Cash/Share A$0.05 statistically significant at weeks four and eight in the total
General: Intraday price and statistics as of 12:24 pm AEST, 10/2/18. population (p<0.05).
EPS (A$) Diluted Anxiolytic effect:
Full Year - Jun 2017A 2018A 2019E Trend towards improvement on CAPS-5 Criterion E (arousal and
1st Half (0.02) (0.02) (0.03) reactivity), question 3 (hypervigilance) in the total population.
2nd Half 0.00 (0.03) (0.02) Trend towards improvement on CAPS-5 Criterion E , question 4
FY (0.01) (0.05) (0.05) (exaggerated startle response) in the total population.
Revenue (A$M) We asked management if the treatment effect waned in any fashion
Full Year - Jun 2017A 2018A 2019E since these positive subdomain data were seen in only the mid-part
1st Half 7.1 7.2 5.4 of the study. To this end, management indicated that patients on the
2nd Half 21.1 5.3 7.2 treatment arms continued to improve, and that the statistical differences
FY 28.3 12.5 12.5 narrowed later in the study due to changes in the placebo arm.
Bionomics results are announced on a biannual basis. EPS may not
add to full year due to increases in share count and rounding. KOL feedback highlights shear complexity of the disorder.
Vol. (mil) Price Participating on the conference call to discuss the data, was Dr. Murray
4 0.7
Stein, Distinguished Professor of Psychiatry at UCSD. Dr. Stein was
very clear in his commentary and considered Bionomics brave to pick
3 0.6
PTSD this early in the drug's development due to the complexity
of the disorder, and as regulatory evolution of endpoints are fine
2 0.5 tuned for more specific symptoms, could see BNC210 revisiting the
indication. PTSD has not seen a new drug in over 20 years and is
1 0.4 a very complex disorder with symptoms being highly variable among
patients (e.g., insomnia, concentration, startling, daytime flashbacks,
0 0.3 dysphonia). There is also a lack of understanding of differences in
OCT-17 FEB-18 JUN-18 OCT-18 biology based on trauma types.

What now? The damage is done from a shares standpoint, and our
call was incorrect based on this complex indication. However, the
entire investment case was not riding on PTSD. Recall the positive
randomized Phase 2 in generalized anxiety disorder (GAD) and positive
CCK4 panic attack clinical data. Further, a Phase 2 is ongoing in
elderly agitation with data expected in 1Q19 (discussed below). As the
company is hunkering down a bit, it is ceasing development in PTSD,
is currently not going to conduct any additional BNC210 studies, and is
assessing partnering and strategic options for the asset. The company
also plans to bring forward one to two additional pipeline candidates
from its discovery platform by June 30, 2019.
(continued on next page)

For definitions and the distribution of analyst ratings, analyst certifications, and other disclosures, please refer to pages 6 - 7 of this report.
Bionomics Limited October 2, 2018
A potential new indication for BNC210 to treat agitation in diseased elderly population; field is wide open. Recently,
Bionomics hosted a KOL call with Dr. Paul Rosenberg, Professor of Psychiatry and Behavioral Sciences at Johns Hopkins
University School of Medicine, and we had the opportunity to moderate the discussion with Dr. Rosenberg. Further, Dr.
Rosenberg has not taken part in any of the BNC210 studies, nor has been a consultant to Bionomics. The topic of the call was
to discuss the potential role of the company’s lead asset BNC210 in treating agitation in the elderly population. It has become
apparent that agitation, on its own, could be considered a definable, clinical, and therefore potentially treatable symptom,
which may guide the development of precise therapeutic interventions in order to ameliorate the quality of life of both patients
and caregivers (discussed below). Of note, there are no approved therapies for agitation and the current standards of care,
benzodiazepines and antipsychotics, have two major pitfalls: (1) overall low efficacy and clinical inconsistency; and (2) a
high risk profile, including the dangerous mortality risk of antipsychotics (e.g., Risperdal) and drug interactions as well as the
addiction and sedative properties of benzodiazepines (e.g. Ativan). Considering the lack of an efficient, safe, targeted, and
approved therapy for agitation, especially within the increasing market of Alzheimer's Disease (AD) in the elderly, we believe the
field is wide open for new therapeutic options to treat this indication, such as Bionomics’ BNC210. Further, following physician
and caregiver recommendations and the above concerns of current standards of care, the FDA is amenable to considering
the possibility of valuing agitation as an indication rather than just a symptom linked to more severe CNS diseases such as
AD. Overall, we are encouraged by the ongoing development program for BNC210 across multiple clinical indications, and we
believe that Bionomics continues to build its credibility as a potential leader in the CNS space (discussed below). Importantly,
we look forward to the execution of the company’s upcoming milestones with special focus on top-line data for the 'restore'
PTSD study expected this month, which represents a major potential tipping point for the shares.

Takeaways from KOL agitation discussion. Dr. Rosenberg is a well-known physician-scientist in the agitation and AD space.
He stressed the pathophysiology of agitation, which we believe may help the understanding of its clinical relevance, links to AD
pathophysiology (discussed below), and why it represents an important medical problem. Key takeaways from Dr Rosenberg’s
discussion are the following: (1) the clinical definition of agitation; (2) the treatment landscape of agitation, which leaves the
door open for new therapeutic options such as BNC210, in our belief; with no approved therapies for agitation, this indication
remains an unmet medical need for both the medical and caregiver communities; and (3) lack of safety of the standard of care(s)
(e.g., antipsychotics and sedatives); agitation together with depression and apathy are the most common psychiatric symptoms
associated with AD and other indications such as dementia, with a remarkable impact on the quality of life of the population,
as well as caregivers. Notably, 40 to 50% of AD patients will present any of these (three) symptoms at some point during the
course of the disease, suggesting that these patients may benefit from one or more targeted therapies such as BNC210.

Agitation as a clinical indication. Agitation can be defined as one of the three provisional criteria recently established
from the International Association of Gerontology and Geriatrics (IAGG), which are: (1) excess motor activity such as
walking around, trying to escape, grabbing and re-arranging possessions; patients could spend all day doing these activities
causing an enormous amount of draining work by caregivers trying to manage the situation and eventually “lock the door” to
avoid the escape of the patient; (2) verbal aggression; and (3) physical aggression. Overall, the exacerbation of agitation’s
symptomatology in AD patients has an elevated economic cost, leading to a higher public health hospitalization burden, and
decreased work productivity of caregivers who must leave work to take care of their family members, for example.

A closer look at the Bionomics’ agitation trial; data expected 1Q19. Bionomics’ trial on agitation is a randomized, double-
blind, placebo-controlled study with a five-day treatment period designed to evaluate the effect of BNC210 on the resolution of
agitation vs. placebo. The primary endpoint is the Pittsburgh Agitation Scale (PAS) in hospitalized elderly patients (40 patients)
from five sites in Australia. Excluded patients have severe AD, Parkinson Disease and premorbid psychotic patients. Data from
this study are expected in 1Q19. Because there are no FDA approved scales for agitation, the company selected PAS, which
is expected to easily assess the responses of BNC210 in the acute setting or patients with active agitation symptomatology.
Of note, the PAS was developed to determine the extent of agitation in dementia patients. Notably, it is estimated that the
prevalence of agitation in dementia is 3.1% of patients >40 years of age. The study’s secondary objectives include the safety
and tolerability, as well as changes in the global function of BNC210 vs. placebo by using the Clinical Global Impression Scale
(CGI). Interestingly, data obtained with the CGI commonly associate well with the standard research drug efficacy scales such
as the Hamilton Rating Scale for Anxiety (HAM-A) and the Hamilton Rating Scale for Depression (HAM-D). Key features of the
CGI are higher feasibility, simplicity and velocity of use, which makes it the most normally employed clinical tool to evaluate
drug efficacy across multiple treatments within CNS diseases. As for the scales, it is important to mention that, regardless the
achievement of the primary endpoint, PAS data are going to be confirmed with the CGI analyses, which could be also indicative
of increased drug’s activity. With regard to safety, drug safety is also considered a crucial secondary endpoint as the treatment
population consists of elderly people who may present decreased liver and kidney functions (dominant tissues for the PK of
the drug). To date, no negative drug-drug interaction effects have been observed with BNC210 in all studies, to date, which
might translate into increased safety profile. As observed in both mice and humans, a single dose of BNC210 deploys quickly in
inhibiting amygdala activation with anti-panic and anti-anxiety functions. Per trial design, hospitalized patients showing active
agitation’s symptoms will be monitored for 24 hours to exclude natural resolution of the symptoms. If symptoms persist following
this time window, patients will be randomized into the study.

Valuation and risks to price target achievement. We are maintaining our Buy rating but are reducing our price target
to A$0.90 from A$2. The primary factors contributing to our valuation change include the following: (1) removing PTSD
from our projections; (2) adjustment to share count; (3) adjustment to base year; (4) adjusting projected launch year for
generalized anxiety disorder from 2020 to 2025; (5) introducing preliminary projections for elderly agitation with a 2027 launch
H.C. WAINWRIGHT & CO. EQUITY RESEARCH 2
Bionomics Limited October 2, 2018
year, 10% chance of success, and $450 million in peak sales; and (6) increasing our discount rate to 20% from 15% to
take into consideration less visibility on the path forward for BNC210. Our valuation is based on our clinical net present
value (NPV) model, which is currently driven by the company's lead asset, BNC210. This model allows us to flex multiple
assumptions affecting a drug's potential commercial profile. Factors which could impede reaching our price target include
failed or inconclusive clinical trials or inability of the company to secure adequate funding to progress its drugs through the
development pathway.

H.C. WAINWRIGHT & CO. EQUITY RESEARCH 3

Bionomics Limited October 2, 2018

(AUD$ in millions except per share data)

Profit & Loss - June fiscal 2013A 2014A 2015A 2016A 2017A 2018A 2019E 2020E 2021E

Licensing 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
R&D collaborations 3.7 19.9 6.8 8.1 18.6 4.0 4.5 5.2 5.2
Product and Royalties 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other revenues 8.1 7.6 9.8 13.6 9.6 8.5 8.0 8.3 8.5
Revenues 11.8 27.5 16.6 21.7 28.3 12.5 12.5 13.5 13.7

CoGS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Gross Profit 11.8 27.5 16.6 21.7 28.3 12.5 12.5 13.5 13.7
Gross margin 100% 100% 100% 100% 100% 100% 100% 100% 100%

SG&A 5.6 5.8 10.7 12.2 8.3 7.5 6.1 6.3 6.8
R&D 16.2 17.8 23.2 24.8 24.2 25.2 28.0 33.6 42.0
Other op ex 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

EBIT (10.0) 3.9 (17.3) (15.3) (4.3) (20.3) (21.6) (26.4) (35.1)
EBIT margin nm 14% nm nm nm nm nm nm nm

Depreciation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Amortisation Intangibles 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EBITDA (10.0) 3.9 (17.3) (15.3) (4.3) (20.3) (21.6) (26.4) (35.1)
EBITDA margin nm 14% nm nm nm nm nm nm nm

Non operating expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net Interest Income/Other 1.9 (0.4) 3.3 0.8 (0.1) (3.9) (2.2) 1.0 1.0
Interest expense 0.0 0.0 0.0 1.9 2.0 2.1 1.7 1.4 0.8
EBT (8.1) 3.6 (14.0) (16.4) (6.3) (26.2) (25.6) (26.8) (34.9)
EBT margin nm 13% nm nm nm nm nm nm nm

Provision for taxes 0.0 0.7 (0.3) (0.7) 0.5 (1.2) 0.0 0.0 0.0
Net Income (8.1) 3.6 (14.0) (16.4) (6.3) (26.2) (25.6) (26.8) (34.9)
Participation of preferred stock 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Net Income to common (8.1) 2.9 (13.6) (15.6) (6.9) (25.1) (25.6) (26.8) (34.9)
net margin nm 10% nm nm nm nm nm nm nm

NoSH 374.4 416.9 340.9 457.3 481.4 482.3 501.9 512.0 520.0
EPS - basic (0.02) 0.01 (0.04) (0.03) (0.01) (0.05) (0.05) (0.05) (0.07)
EPS - diluted (0.02) 0.01 (0.04) (0.03) (0.01) (0.05) (0.05) (0.05) (0.07)
Source: http://www.bionomics.com.au/investors/financial-reports and H.C. Wainwright estimates
Joseph Pantginis, Ph.D. jpantginis@hcwco.com

H.C. WAINWRIGHT & CO. EQUITY RESEARCH 4

Bionomics Limited October 2, 2018

Half-yearly P&L - June fiscal Dec June June Dec June June Dec June June Dec June June
AUD$ in millions FH1'16A FH2'16A FY'16A FH1'17A FH2'17A FY'17A FH1'18A FH2'18A FY'18A FH1'19E FH2'19E FY'19E
Licensing 0.00 0.00 0.0 0.00 0.00 0.0 0.00 0.00 0.0 0.00 0.00 0.0
R&D collaborations 4.08 4.07 8.1 2.51 16.10 18.6 2.35 1.60 4.0 2.10 2.42 4.5
Product and Royalties 0.00 0.00 0.0 0.00 0.00 0.0 0.00 0.00 0.0 0.00 0.00 0.0
Other revenues 6.13 7.45 13.6 4.63 5.02 9.6 4.82 3.69 8.5 3.25 4.75 8.0
Revenues 10.21 11.52 21.7 7.14 21.12 28.3 7.17 5.29 12.5 5.35 7.17 12.5

CoGS 0.00 0.00 0.0 0.00 0.00 0.0 0.00 0.00 0.0 0.00 0.00 0.0
Gross Profit 10.21 11.52 21.7 7.14 21.12 28.3 7.17 5.29 12.5 5.35 7.17 12.5
Gross margin 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

SG&A 6.92 5.32 12.2 4.96 3.33 8.3 4.55 2.93 7.5 2.95 3.18 6.1
R&D 12.07 12.70 24.8 9.34 14.89 24.2 11.76 13.49 25.2 13.67 14.35 28.0
Other op ex 0.00 0.00 0.0 0.00 0.00 0.0 0.00 0.00 0.0 0.00 0.00 0.0

EBITDA (8.8) (6.5) (15.3) (7.2) 2.9 (4.3) (9.1) (11.1) (20.3) (11.3) (10.4) (21.6)
EBITDA margin nm nm nm nm

Non operating expenses 0.00 0.00 0.0 0.00 0.00 0.0 0.00 0.00 0.0 0.00 0.00 0.0
Net Interest Income/Other 0.31 0.52 0.8 (0.97) 0.85 (0.1) (1.21) (2.71) (3.9) (1.21) (1.02) (2.2)
Interest expense 0.00 1.89 1.9 0.99 0.98 2.0 0.87 1.19 2.1 0.87 0.87 1.7
EBT (8.5) (7.9) (16.4) (9.1) 2.8 (6.3) (11.2) (15.0) (26.2) (13.3) (12.3) (25.6)
EBT margin nm nm nm nm

Provision for taxes 0.00 (0.72) (0.7) 0.07 0.46 0.5 0.25 (1.41) (1.2) 0.00 0.00 0.0
Participation of preferred stock
Net Income to common (8.5) (7.2) (15.6) (9.2) 2.3 (6.9) (11.5) (13.6) (25.1) (13.3) (12.3) (25.6)
net margin nm nm nm nm

NoSH 433.67 434.00 457.26 481.22 481.48 481.35 481.97 482.60 482.29 501.00 502.80 501.90
EPS - basic (0.02) (0.01) (0.03) (0.02) 0.00 (0.01) (0.02) (0.03) (0.05) (0.03) (0.02) (0.05)
Source: http://www.bionomics.com.au/investors/financial-reports and H.C. Wainwright estimates
Joseph Pantginis, Ph.D. - jpantginis@hcwco.com

H.C. WAINWRIGHT & CO. EQUITY RESEARCH 5

Bionomics Limited October 2, 2018
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H.C. WAINWRIGHT & CO, LLC RATING SYSTEM: H.C. Wainwright employs a three tier rating system for evaluating both
the potential return and risk associated with owning common equity shares of rated firms. The expected return of any given
equity is measured on a RELATIVE basis of other companies in the same sector. The price objective is calculated to estimate
the potential movements in price that a given equity could reach provided certain targets are met over a defined time horizon.
Price objectives are subject to external factors including industry events and market volatility.

RETURN ASSESSMENT
Market Outperform (Buy): The common stock of the company is expected to outperform a passive index comprised of all the
common stock of companies within the same sector.
Market Perform (Neutral): The common stock of the company is expected to mimic the performance of a passive index
comprised of all the common stock of companies within the same sector.
Market Underperform (Sell): The common stock of the company is expected to underperform a passive index comprised of
all the common stock of companies within the same sector.

Rating and Price Target History for: Bionomics Limited (BNO-AU) as of 10-01-2018
I:BUY:AUD2
03/20/17
0.70

0.60

0.50

0.40

0.30

0.20
Q3 2016 Q1 Q2 Q3 2017 Q1 Q2 Q3 2018 Q1 Q2 Q3 2019

Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement
of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company
or one of its affiliates or subsidiaries within the past 12 months.
Distribution of Ratings Table as of October 1, 2018
IB Service/Past 12 Months
Ratings Count Percent Count Percent
Buy 287 93.79% 114 39.72%
Neutral 16 5.23% 4 25.00%
Sell 1 0.33% 0 0.00%
Under Review 2 0.65% 0 0.00%
Total 306 100% 118 38.56%

H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer.

I, Joseph Pantginis, Ph.D. , certify that 1) all of the views expressed in this report accurately reflect my personal views about
any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly
related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of
my household is an officer, director or advisory board member of these companies.

None of the research analysts or the research analyst’s household has a financial interest in the securities of Bionomics Limited
(including, without limitation, any option, right, warrant, future, long or short position).
As of August 31, 2018 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities
of Bionomics Limited.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has
reason to know at the time of publication of this research report.

H.C. WAINWRIGHT & CO. EQUITY RESEARCH 6

Bionomics Limited October 2, 2018

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any
specific investment banking services or transaction but is compensated based on factors including total revenue and profitability
of the Firm, a substantial portion of which is derived from investment banking services.

The Firm or its affiliates did not receive compensation from Bionomics Limited for investment banking services within twelve
months before, but will seek compensation from the companies mentioned in this report for investment banking services within
three months following publication of the research report.

The Firm does not make a market in Bionomics Limited as of the date of this research report.

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H.C. WAINWRIGHT & CO. EQUITY RESEARCH 7